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Secular Stagnation? The Effect of Aging on Economic Growth in the Age of Automation

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  • Daron Acemoglu
  • Pascual Restrepo

Abstract

Several recent theories emphasize the negative effects of an aging population on economic growth, either because of the lower labor force participation and productivity of older workers or because aging will create an excess of savings over desired investment, leading to secular stagnation. We show that there is no such negative relationship in the data. If anything, countries experiencing more rapid aging have grown more in recent decades. We suggest that this counterintuitive finding might reflect the more rapid adoption of automation technologies in countries undergoing more pronounced demographic changes, and provide evidence and theoretical underpinnings for this argument.

Suggested Citation

  • Daron Acemoglu & Pascual Restrepo, 2017. "Secular Stagnation? The Effect of Aging on Economic Growth in the Age of Automation," NBER Working Papers 23077, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:23077
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    References listed on IDEAS

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    1. Thomas Lindh & Bo Malmberg, 1999. "Age structure effects and growth in the OECD, 1950-1990," Journal of Population Economics, Springer;European Society for Population Economics, vol. 12(3), pages 431-449.
    2. James Feyrer, 2007. "Demographics and Productivity," The Review of Economics and Statistics, MIT Press, vol. 89(1), pages 100-109, February.
    3. Nicole Maestas & Kathleen J. Mullen & David Powell, 2023. "The Effect of Population Aging on Economic Growth, the Labor Force, and Productivity," American Economic Journal: Macroeconomics, American Economic Association, vol. 15(2), pages 306-332, April.
    4. Nicole Maestas & Kathleen Mullen & David Powell, 2014. "The Effect of Population Aging on Economic Growth," Discussion Papers 14-012, Stanford Institute for Economic Policy Research.
    5. Robert J. Gordon, 2016. "Perspectives on The Rise and Fall of American Growth," American Economic Review, American Economic Association, vol. 106(5), pages 72-76, May.
    6. Daron Acemoglu & Pascual Restrepo, 2016. "The Race Between Machine and Man: Implications of Technology for Growth, Factor Shares and Employment," NBER Working Papers 22252, National Bureau of Economic Research, Inc.
    7. Nicole Maestas & Kathleen J. Mullen & David Powell, 2016. "The Effect of Population Aging on Economic Growth, the Labor Force and Productivity," NBER Working Papers 22452, National Bureau of Economic Research, Inc.
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    More about this item

    JEL classification:

    • E30 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - General (includes Measurement and Data)
    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries

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